The New York Senate has an opportunity to ensure home buyers have the ability to protect their families from flooding by passing Senate Bill 5400, which would give home buyers the right to know a property’s flood risk. The Assembly has already passed a companion bill (A1967) granting home buyers this right. With less than two weeks left in the session, the Senate must act swiftly to pass this much-needed bill.
New York is no stranger to devastating flooding. That’s why prospective buyers must have a right to know a property’s flood history before deciding to call it home. When a house floods, damages can include water-logged drywall, warped floors, ruined mechanical systems, and potential mold infections. More significantly, flooding has ripple effects that disrupt people’s lives and livelihoods, such as missed work or school, and temporary or permanent displacement.
Hundreds of thousands of Americans already live in homes that have flooded. And a home that has flooded once is more likely to flood again. The more information home buyers have about flooding, the better equipped they are to avoid or mitigate the next potential disaster.
Unfortunately, obtaining such information is not easy for home buyers in New York. The Empire State lacks adequate flood hazard disclosure requirements concerning real estate transactions in at least two ways. First, New York has a loophole through which an owner can opt-out of disclosure through paying a $500 fee. Eight out of ten sellers have used this provision to avoid disclosure entirely by simply paying the fee.
Second, even if a seller were to provide a buyer the New York Property Condition Disclosure Statement, they would only need to disclose a minimum amount of information concerning a property’s flood risk in comparison to other states. New York currently receives and “F” in a 50-state assessment of flood-related disclosure laws prepared by Columbia Law School’s Sabin Center and NRDC.
Further, home buyers are hard-pressed to find property-specific flood information, such as the number of times a home has flooded, from other sources. The Federal Emergency Management Agency (FEMA) is prohibited from disclosing property-specific flood data due to the Privacy Act. Home inspection also might not reveal such information, especially if the damage has been repaired. Certain private services provide some information on flood mapping and history, but some of them charge for it, and not all of them provide information at the address level. None of them interview the sellers, who would know whether they had experienced flooding while owning the property, and would have to disclose this under the proposed law.
In New York, the lack of disclosure concerning flooding can have serious financial ramifications. According to a study by Milliman, New York home buyers who purchase previously flooded homes can expect to pay, on average, more than $90,000 over a 30-year mortgage to repair flood-related damage in comparison to a home that has not previously flooded. The implication of these high costs is that someone who is unwittingly purchasing a home with prior flood damage, would be underestimating their flood risk by a factor between 15 and 32.
Senate Bill 5400 would require sellers to disclose to homebuyers whether a property is in a FEMA-designated designated flood area, such as an area subject to a 100-year or 500-year flood; is subject to any requirement under federal law to obtain and maintain flood insurance on the property; has a FEMA elevation certificate available for it; and had a claim for flood damage to the property filed with any insurance provider, including the National Flood Insurance Program.
The proposed legislation’s long overdue reforms would ensure that New York home buyers are fully informed about the risks of flooding so they can take the necessary steps to protect their belongings and families. The Senate must follow the Assembly’s lead.